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Commodities and Fair Trade

Commodity dependence is a key factor in the economies of a significant number of developing countries with more than 50 developing countries depending on 3 or fewer commodities for over half of their export earnings. Many commodities are experiencing their lowest price for many years and this is resulting in immense hardship in these producing countries.

The former Secretary of State, Patricia Hewitt, set up a Government-Industry Working Group on Commodities in December 2001 to consider what industry and government could do together to improve the situation of poor commodity dependent farmers (for further details see Working Group Commodities report and Commodities Strategy paper in related documents link).

The UK is actively involved in the work of the Common Fund of Commodities, and BERR provides the UK Governor and Alternate. The UK also plays a part in a range of commodity bodies either as an individual member or through EC membership.

The European Commission published a Communication on Agricultural Commodity Chains, Dependence and Poverty – a proposal for an EU Action Plan in February 2004(see related documents link for full communication).

Fair trade

The Government supports the aims of the fair trade movement and believes that Fairtrade gives an instant and clear indication to consumers that disadvantaged consumer groups in developing countries receive a minimum price above that offered by mainstream markets.

By choosing Fairtrade products consumers are making a real difference to the livelihoods of some of the poorest farmers in the world, which can make the difference between simply existing and having a sustainable future.

The Government encourages companies to participate in fair trade practices. Government support for Fairtrade is part of a wider programme designed to mainstream social responsible practices in the corporate sector.

The Government actively supports the Fairtrade Foundation in raising business and consumer awareness of fairly traded products through educational and promotional activities.

We do, however, not see fair trade as a solution to commodity price fluctuations and/or declines prices or limited market access for poor producers. This is a complex problem and unfortunately, there is no simple solution.

For further details, contact:

Sue Blackwell
Trade Policy Unit
Tel: 0207 215 5778
Fax: 0207 215 2235
E-mail: sue.blackwell@berr.gsi.gov.uk

Simon Collingwood
Trade Policy Unit
Tel: 020 7215 5550
Fax: 020 7215 2235
E-mail: simon.collingwood@berr.gsi.gov.uk